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According to a recent report by consultancy Wood Mackenzie, the average cost of global shipping fuel will rise by about 25%
in 2020 as new sulphur content limits will come into effect in 2020.
At current prices, this increase will increase at an annual rate of about $24 billion, which means that the cost of doing business for shipping companies will rise significantly (the current annual fuel price in the shipping industry totals about $100 billion).
However, if no ships are equipped with scrubbers (so if all ships simply switch to low-sulfur options), that number could actually add $60 billion
a year.
In response, the new rules scheduled by the IMO in 2020 aim to reduce air pollutant emissions
through requirements for ships switching to low-sulphur fuels.
In particular, the regulations are expected to force many ships to switch to marine diesel and ultra-low sulphur fuel oil
.
Reuters noted that the new rules "will cut the maximum sulphur emissions from ship combustion globally to 0.
5%
of fuel content in 2020 from the current 3.
5 percent.
" Ships with FGDs can continue to burn cheaper high-sulfur fuel oil, but most of them cannot be installed
in time.
”
Iain Mowat, senior analyst at Wood Mackenzie, explains: "Switching to MGO (offshore gasoline) is a more expensive solution, and with full compliance, freight rates could go up, probably adding around $1 per barrel to the cost
.
"If Wood Mackenzie calculates, only about 2% of the world's ships will have desulfurizers
installed by 2020.
According to a recent report by consultancy Wood Mackenzie, the average cost of global shipping fuel will rise by about 25%
in 2020 as new sulphur content limits will come into effect in 2020.
At current prices, this increase will increase at an annual rate of about $24 billion, which means that the cost of doing business for shipping companies will rise significantly (the current annual fuel price in the shipping industry totals about $100 billion).
However, if no ships are equipped with scrubbers (so if all ships simply switch to low-sulfur options), that number could actually add $60 billion
a year.
In response, the new rules scheduled by the IMO in 2020 aim to reduce air pollutant emissions
through requirements for ships switching to low-sulphur fuels.
In particular, the regulations are expected to force many ships to switch to marine diesel and ultra-low sulphur fuel oil
.
Reuters noted that the new rules "will cut the maximum sulphur emissions from ship combustion globally to 0.
5%
of fuel content in 2020 from the current 3.
5 percent.
" Ships with FGDs can continue to burn cheaper high-sulfur fuel oil, but most of them cannot be installed
in time.
”
Iain Mowat, senior analyst at Wood Mackenzie, explains: "Switching to MGO (offshore gasoline) is a more expensive solution, and with full compliance, freight rates could go up, probably adding around $1 per barrel to the cost
.
"If Wood Mackenzie calculates, only about 2% of the world's ships will have desulfurizers
installed by 2020.
